Banking Newsletter - December 2012

We cover regulation, customer/channel trends, ATO liquidity charges, consumer protection, Sibos conference and results from major banks and mutuals.

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Banking Newsletter - December 2012

Perspectives on distribution trends 

There is a lot going on in the changing world of customers and channels. We bring together some relevant information on developments that will interest the curious banker.

Retail banking video advice — what does the future hold?

Real-time, interactive video represents a powerful advice channel when dealing with customers. KPMG examined the uptake of video advice in organisations representing over 90 percent of the Australian domestic retail banking market.

We found 11 percent of respondents have already undertaken a full roll out of video advice whilst 22 percent are undertaking a pilot. Video advice will be an attractive channel for delivering financial planning and wealth management  advice to relevant customer segments. 67 percent of our sampled organisations regard video advice as inappropriate for institutional customers and 33 percent have no immediate plans to trial it with this group.


We believe most banks will use the branch-based sub-channel to build and perfect their interactive video offerings. However, it is the direct-to-device option that will create the most transformative opportunities, freeing banks and their customers from the constraints of branch networks and static terminals.


Investing in e-conveyancing — the way forward

Lenders are faced with the dilemma of whether to invest in IT systems to automate processes, or outsource/offshore, recognising that it is often difficult to fix much of the problem. The phased introduction of e-conveyancing will deliver an automated solution for mortgage lenders which will deliver efficiency gains.


In a recent 2012 study, KPMG estimates that the first phase of e-conveyancing could automate up to 30 percent of current mortgage processing manual workloads, with further benefits in subsequent releases. With e-conveyancing transacting parties will no longer be required to be physically present at settlement, and will be able to exchange title deeds electronically, use digital signatures and pay via electronic funds transfers instead of providing bank cheques.


E-conveyancing will offer efficiency benefits for banks, and lower the cost of conveyancing for consumers. To maximise the efficiency benefit banks should plan how they best interface their systems with the e-conveyancing solution and re-design internal processes. E-conveyancing will result in some functions being 'location agnostic' which may create opportunities for some banks to re-visit their sourcing strategy.

There is life in the branch yet

Customer research conducted by KPMG in the UK in the first half of 2012 suggests a changing role for the branch — but a role nonetheless. Our research shows the branch will remain the channel-of-choice for both sales and service for a sizeable proportion of the population. Rather than kill the branch off, we believe the explosion of digital technologies could be its salvation by allowing for the development of new branch formats which blur the distinctions between the branch and direct channels.


In our view, the successful players in the branch channel will be those which develop new formats which respond to the needs of their customers in different local markets and offer a high quality sales and service experience at optimised cost levels.


For more information on any of the articles or to discuss findings of the video advice survey in Australia, please contact us.

Daniel Knoll

Daniel Knoll
Partner and Retail Banking Centre of Excellence Leader

+61 2 9455 9148

Peter Harmston

Peter Harmston
Manager, Operational Improvement Services

+61 2 9346 5528

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